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Bankruptcy Proceedings Update – FTX, BlockFi, Celsius




With various interconnected Chapter 11 Bankruptcy proceedings currently underway, it can be hard to stay up to date on the latest developments.  The following is a brief look at the most recent tidbits to come from FTX, BlockFi, and Celsius.


During the peak of its popularity, FTX was dishing out donations to political parties in the United States both publicly and behind the scenes.  While such actions may have been well-received at the time, we now know that the funds were essentially the proceeds of crime as they were misappropriated from clients of the exchange.

With the above in mind, FTX has just released a statement addressing having been, “…approached by a number of recipients of contributions or other payments”.  The purpose of this outreach?  How to return the funds.

“The FTX Debtors invite all recipients of such payments to contact the FTX Debtors at ([email protected]) to make arrangements for the return of such payments. To the extent such payments are not returned voluntarily, the FTX Debtors intend to commence actions before the Bankruptcy Court to require the return of such payments, with interest accruing from the date any action is commenced.”

As it stands, FTX has made it clear that while it is encouraging recipients of past funds by the exchange to return them voluntarily, it will take action in court if needed to force the matter.  One particular sum of capital that people are waiting to see returned is roughly $5M given to the Biden campaign in 2020.


While FTX continues the monumental task of getting its books in order, and regaining access to illegally dispersed funds, BlockFi has announced that it has officially filed a motion to begin returning certain funds in its control to a subset of its clients.

The assets frozen by BlockFi can largely be broken down in to two categories – those holding funds in an interest bearing account, and those holding funds in the BlockFi wallet.  In its motion, BlockFi will ask the court for permission to begin reimbursing clients which fall in the latter category.

“Today, we took an important step toward our goal of returning assets to clients through our chapter 11 cases.  It is our belief that clients unambiguously own the digital assets in their BlockFi Wallet Accounts.”

Although this development may be welcome news for many clients of BlockFi, a resolution should not be expected in the coming days, but rather weeks.  The company indicates it expects the filed will be heard on January 9th, 2023 during its next court hearing.  Meanwhile, international clients of BlockFi will need to wait until January 23, 2023 for the motion to be heard in court.


Only days after Binance made its successful bid of over $1B for Voyager's assets, Celsius announced in court that it has now received various bids for its own assets.  Per Bloomberg, these include its,

  • retail platform
  • mining business

These assets are stated as having bids placed individually, and as a combination of each from a pool of over 30 different parties.

To highlight how intertwined some of these bankruptcy proceedings are, Celsius has also recently filed a motion involving beleaguered rival, Voyager.  In the U.S., the ability within bankruptcy proceedings, Section 547, to demand ‘clawbacks' exists – a phrase which refers to the reversal of certain transactions made by the company up to 3 months prior to filing for bankruptcy, under certain circumstances.  It now appears as though Celsius Network is looking to take advantage of this, as it hopes to ‘clawback' over $7.5M from Voyager, which it believes it is owed through maintained ‘Earn' accounts.

Joshua Stoner is a multi-faceted working professional. He has a great interest in the revolutionary 'blockchain' technology.